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The Complete Payroll Blog

What employers need to know about Forms 941 and 941-X

Posted by admin | Jul 29, 2015 2:43:54 PM

If you take care of withholding income taxes, social security tax, or Medicare tax from your employees' paychecks, or if you are required to pay the employer's portion of social security or Medicare tax, you're familiar with using Form 941 to report those taxes. But as you know, the IRS changes its rules and guidelines regularly. Have the requirements for Form 941 changed in the last year?

One recent development is the retroactive increase in excludable transit benefits, which is explained in full under Notice 2015-2 on the IRS website. As for Social Security and Medicare taxes for 2015, they did not change from 2014. The Social Security tax rate is still 6.2% each for the employee and employer, while the Social Security wage base limit remains at $118,500. The Medicare tax rate is still 1.45% each for the employee and employer, and there is no wage base limit for Medicare tax.

  • Social Security and Medicare taxes apply to the wages of household workers you paid $1,900 or more in cash or gave an equivalent form of compensation to in 2015.
  • Social Security and Medicare taxes apply to election workers who are paid $1,600 or more in cash or an equivalent form of compensation in 2015.

If employees want to participate in leave-based donation programs to aid victims of the Ebola Virus Disease (EVD) outbreak in Guinea, Liberia, and Sierra Leone, here's how that works: employees may donate their vacation, sick, or personal leave in exchange for employer cash payments made before January 1, 2016, to qualified tax-exempt organizations providing relief. The donated leave should not be included in the income or wages of the employee; as the employer, you can deduct the cash payments as business expenses or charitable contributions.

If you have hired qualified veterans, the work opportunity tax credit is now available for eligible veterans who began work after December 31, 2013, and before January 1, 2015. Qualified tax-exempt organizations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C,.

And remember, effective for tax periods beginning after December 31, 2013, the credit for COBRA premium assistance payments cannot be claimed on Form 941. Instead, after filing your Form 941, you'll need to file Form 941-X, to claim the COBRA premium assistance credit.

Dealing with the IRS can be a headache. Dealing with your payroll doesn't have to be! When you work with Complete Payroll Processing, we deal with the IRS for you—along with all of the other aspects of managing payroll. Call or contact us today to see what we can do for you!

Written by admin

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The materials and information available at this website and included in this blog are for informational purposes only, are not intended for the purpose of providing legal advice, and may not be relied upon as legal advice.  The employees of Complete Payroll are not licensed attorneys. This information and all of the information contained on this website are provided pursuant to and in compliance with federal and state statutes. It does not encompass other regulations that may exist, including, but not limited to, local ordinances. Complete Payroll makes no representations as to the accuracy, completeness, currentness, suitability, or validity of the information on this website and does not adopt any information contained on this website as its own. All information is provided on an as-is basis.  Please consult an attorney to obtain advice with respect to any particular question or issue.